Recording Payroll and Payroll Taxes Beamon Corporation had the following payroll
ID: 2524463 • Letter: R
Question
Recording Payroll and Payroll Taxes
Beamon Corporation had the following payroll for April:
Officers' salaries
$320,000
Sales salaries
670,000
Federal income taxes withheld
190,000
FICA taxes withheld
75,000
Health insurance premiums withheld
16,000
Union dues withheld
12,000
Salaries (included above) subject to federal unemployment taxes
550,000
Salaries (included above) subject to state unemployment taxes
600,000
Required:
Prepare journal entries on April 30 to record:
a. Accrual of the monthly payroll.
b. Payment of the net payroll.
c. Accrual of employer's payroll taxes. (Assume that the FICA tax matches the amount withheld, the federal unemployment tax is 0.6 percent, and the state unemployment tax is 5.4 percent.)
d. Payment of all liabilities related to this payroll. (Assume that all are settled at the same time.)
Officers' salaries
$320,000
Sales salaries
670,000
Federal income taxes withheld
190,000
FICA taxes withheld
75,000
Health insurance premiums withheld
16,000
Union dues withheld
12,000
Salaries (included above) subject to federal unemployment taxes
550,000
Salaries (included above) subject to state unemployment taxes
600,000
Explanation / Answer
Journal Entry S. No. Account Titles and explanation Debit Credit A. Office Salaries Expense $320,000 Sales Salaries Expense $670,000 Salaries Payable $697,000 FICA Taxes Withheld $75,000 Health insurance Premium With Held $16,000 Federal income Tax Withheld $190,000 Union Dues Withheld $12,000 To Record Accrual of Monthly Payroll B. Salaries Payable $697,000 Cash $697,000 To Record Payment of Net Payroll C. Payroll Tax Expense $110,700 FICA Taxes Withheld $75,000 Federal Unemployment tax (550000*0.6%) $3,300 State Unemployment tax (600000*5.4%) $32,400 (To Record the employer's payroll tax expense) D. FICA Taxes Withheld ($75000*2) $150,000 Health insurance Premium With Held $16,000 Federal income Tax Withheld $190,000 Union Dues Withheld $12,000 State Unemployment tax $32,400 Federal Unemployment tax $3,300 Cash $403,700 To Record Payment of Payroll's Liabilities
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